Agricultural Investment Opportunities in Ethiopia

Strong Economy, Business Environment and Investment Incentives Robust AgroClimactic Conditions & Land Availability

11% annual GDP growth rate since 2005 Projected to be 3rd fastest growing economy in the world for the next four years by The Economist, behind China and India Political stability which fosters a peaceful and secure working environment Simple taxation structure and tax breaks for investors Full repatriation of profits Zero tolerance to corruption and fraud Large domestic market (~83M); good access to regional/international markets e.g. COMESA (~350m) Generous investment incentives e.g. import/export duty exemptions, income tax holidays Ethiopia is home to 18 major agro-ecological zones and 49 agro-ecological sub-zones The country has the soils and climate suitable for growing over ~150 types of crops, including high value commodities such as coffee, sesame and other oilseeds, cereals, spices, fruits and vegetables

GDP Growth Rates, 20052010

11% 11% 9% 7% 4% 4% 4%

South Russia Brazil Nigeria India Ethiopia China Africa

Key Land Statistics

Land (ha): 111.5M Arable land (ha): 74.5M Cultivated land (ha): 15.4M Annual Rainfall (western region): 200 cm

Near Term

Longer Term (not exhaustive)

Fruits and Vegetables Large domestic market, and export potential to Middle East/Europe Wheat Staple crop with significant potential for import substitution

Key Value Chains for Investment

Sesame High value export crop with potential for improving foreign exchange earnings through value addition Chickpea - Important nutritional crop in Ethiopia with high domestic consumption Barley Grown by 4M farmers and key for producing malt for the booming brewing industry

Livestock High potential for export to Middle Eastern markets

VISIT ETHIOPIA TO SEE THE OPPORTUNITIES FOR YOURSELF Contact: Khalid Bomba, CEO, ATA (khalid.bomba@ata.gov.et); Mirafe Marcos, Special Programs Officer, ATA (mirafe.marcos@ata.gov.et)

Agricultural Investment Opportunities in Ethiopia

Sesame Hulling Facility

Ethiopia is the worlds 3rd largest sesame exporter, accounting for 14% of global exports but exports the majority of seeds raw Limited domestic processing capacity creates an opportunity to establish a highquality value-addition hulling facility An investment of $6.5M in a sesame hulling facility will return an attractive IRR of 43% at the close of a 5-year investment period with 11% Net Profit margin Potential for positive social benefits for up to 5,000 smallholder farmers (through nucleus farm/out-grower scheme), resulting in an average of 17% income increase

Projected Hulling Plant Revenues ($ millions)

14 11 15 17 19

Year 1 Year 2 Year 3 Year 4 Year 5

Chickpea Flour Processing Plant

Ethiopia offers an attractive market for chickpea flour, with domestic demand for processed products expected to grow Limited competition and market gap offers a high potential opportunity to secure early mover advantages A $6.5M investment in a chickpea flour processing plant should result in an IRR of 34% and a steady state Net Profit margin of 7% Potential to involve up to 27,000 farmers in out-grower schemes

Projected Flour Processing Plant Revenues ($ millions)

16 11 18 21 25

Year 1 Year 2 Year 3 Year 4 Year 5

Barley Malting Plant

The Ethiopian brewing industry is fast-growing at 15-20% per year, and consequently, so is the market for malt barley Recent $400M acquisitions of breweries by Heineken/Diageo, with at least 3 additional plants in pipeline Malting in Ethiopia is under-developed, leading brewers to import ~60% of their malt requirements An investment of $25M in a malting plant will yield an IRR of 24% after 5 years, with a Net Profit margin of 10-12% Potential to involve up to 30,000 farmers in out-grower scheme, improving incomes by upwards of 60% on average

Projected Malting Plant Revenues ($ millions)

13 14 17 19

21

Year 1 Year 2 Year 3 Year 4 Year 5

VISIT ETHIOPIA TO SEE THE OPPORTUNITIES FOR YOURSELF Contact: Khalid Bomba, CEO, ATA (khalid.bomba@ata.gov.et); Mirafe Marcos, Special Programs Officer, ATA (mirafe.marcos@ata.gov.et)